Supply chain coordination model for green product with different payment strategies: A game theoretic approach

Abstract

Abstract In our world, pollution arising from various sources like factories and vehicles, threaten the very environment we live in. We should become more and more aware of the products that pose a threat to our environment because otherwise through our lack of awareness, we will ourselves contribute towards the distractions of our beloved and beautiful world. In this paper, we have bought into focus an work regarding making the supply chain of a product as green as we possibly can. We have developed a strategy based on the manufacturer’s advanced payment policy as well as trade credit facility to the retailer. We have assumed that for any particular retailer, the customers’ demand for his goods is a direct consequence of how green the goods are, along with the selling price and the effort put into the environment friendliness of a product. To this effect, the manufacturer also allows the retailer a credit period for the goods as also a discount that can imposed on the selling price. We have provided a model that optimizes the retailer’s sales effort, the wholesale price demanded by the manufacturer, the green level of the product as well as the selling price effected by the retailers. This model is exemplified numerically of its practicality. We also perform some sensitivity analyses of the model by varying market demand, price elasticity coefficient, greening awareness level and sales effort and the corresponding performance shown by the model are also recorded.